ASX Shares What's looking cheap on the ASX?

Thanks willair, that post makes everything much clearer to me.

True, I think my "more than happy to be educated here" was taken literally (which is fair enough). I was just after the insights given above, rather than having my hand held which my post implied.

 

What's looking cheap on the ASX?
22 pages and nobody has offered a satisfactory answer to that one.

A far better (& easier) question would be Will today's ASX prices look cheap in 20 yrs time ?
Everyone should get that answer right.

If you really think you're smarter than the majority of the other market participants (i.e. those that are selling to you), then research & buy individual shares at the right time. (Hint, as you're spending time reading a property forum then you're unlikely to be smarter than those who have large dedicated research teams).... and spend the next 20 yrs managing the risk around a small basket of shares.

OTOH, if you think Australia (& consequently the companies in the ASX) will continue to grow & prosper, then buy either a LIC (such as AFI, ARG, MLT) or the index (such as VAS) & don't concern yourself with unanswerable questions.

My preference for the last 20 yrs has been the broad-based LICs. I see them as a proxy for the index, but without being forced to hold some of the duds; so there's hopefully a slight out-performance in the long term.

 

The ASX 200 index is around 16.5% cheaper than this time last year

 

Keith, as a long-term investor - what has been your strategy for buying into these LICs? Particularly with regard to their premium/discount to NTA. Ignore it and buy regularly?
I'm grateful for your thoughts and advice. I've baulked at AFI/ARG since I've been interested due to the apparent premium. MLT trades pretty close to NTA as far as I can see.

 

My 2 cents
Most of the good quality companies are still expensive or forecasting low growth or debt ridden. small stocks have run too hard. What is looking better value than getting 2% interest from a term deposit: QBE, Amp, SUL, ORA, VRT, GMG, PTM and FLT. I also like Argo infrastructure LIC.

 

Premium/discount to NTA is largely irrelevant for ARG/AFI. The long established LICs tend to trade at a premium when the market is down & at a discount when the market is high. The bottom line is that they are less volatile than the overall market - this is a good thing - especially for retirees (google Safe Withdrawal Rate).

I would guess the reason is that 'everyone' knows that the LICs are smart enough to be spending their cash reserves when the market is good value. It's worthwhile reading their succinct market commentary every 6 months to see what long term investors think - AFIC :: Australian Foundation Investment Company

So as a general rule, I wouldn't refuse to buy because AFI/ARG/MLT is trading at a small premium to NTA - it usually means the market is low & they are accumulating long term bargains on your behalf .


So the LIC buying strategy is based there being a v. high probability that the market (NOT individual shares) goes up in the long term. So buy when the market is relatively cheap. Only one person is ever lucky enough to buy at the exact bottom - it will NOT be you - don't ever bother trying to attempt it.

I think the regular buying advocated by dollar cost averaging gives an insignificant advantage. I'd prefer to accumulate cash and buy when market forward PE is below long term average - ie times of (preferably extreme) gloom. This may mean waiting for many months, or even years. Aim for anywhere in the cheapest quartile & be very patient. And choosing a long term average depends on your timescale - 5yrs may be reasonable for most ? This will rarely work in the short term, but is very likely to produce above average returns in the longer term.

There are a few long term investors still posting that have done similar to this & managed to retire far earlier than using IP alone.

 

Wow! The LIC premium comment just opened my mind. You are right!

Are we in times of gloom? I've been happy enough to start buying recently, with some cash coming in case xjo hits 4200, or close.

 

Dont bother wiyh the asx. Look at the nasdaq and sp 500.
Eg vmw (nasdaq)...higher aussie will also help.

 

Anyone invested in these funds.

Funds | Montgomery Investment Management

 

Forgive me everybody, as I realise this is a little off-topic, but when tradingroom.com.au gets knocked on the head in a few days time, does anybody have a site that can provide similar (read fast refresh) info to the Quotes/Detailed screen which include a bunch of detailed info including market cap for any particular ASX stock?

 

Anyone invest in this company?,now in a trading halt..imho..



Investor Centre | McGrath Estate Agents

 

Nope but this year, my best performing fund has been:

Australian Shares Fund - Forager Funds

(Past performance is not an indicator of future gains..yadda, yadda)

 

Another of the 95% of ASX listed stocks that are not "investment grade".

 

Do you know what is the ASX code for this fund? or it needs to be purchased via the fund manager?

 

Via the Fund Manager

 

Hi,

Any pundits picking any direct shares? Recently Ansell came up in my nabtrade account as meeting Warren's criteria of good boring business with significant revenues as compared to its competitors.

Since then it has rallied 10-12%

My other pick SHV, purchase order didn't get processed at 3.70, 3.83 was the lowest, since then it has gone to 4.42.

Anyone else buying anything with either a short term or long term hold?

My best pick for this year has been PRY, up 60% since purchase date, MYR up 28% since purchase date. I sold MYR at 25% gain. For long term, got VAS and MLT this year

Any suggestions on what everyone else is doing?

 

Just looking at my portfolio, at current prices if I was topping up I'd be looking at PTM / CTX / SAI.
I like ANN and hold it, added more recently but I'd want to be buying below 1800cps.

 

Have been in Forum Withdrawal Rehab Clinic recently as was spending too much time here. But given my love of LICs (started investing in LICs in 1988 on advice from Daryl Dixon) a post from Keith whose investing experience is immense has me unable to resist sneaking in a post.

In addition to the LIC premium/discount issues wonderfully explained by Keith here's a post from Thornhill from way back in 2003 which I think still has as much relevance today as it did back then. Whether FOFA will have changed things only time will tell. But given human psychology I tend to take the view that the more things change the more they stay the same.

Article :: Listed Investment Companies

Anyhow my first rehab failure, I blame it on Keith.

Cheers
Gordon (recovering forum addict)

 

Fantastic article @austing Thank you for sharing.

 

lol. do share which clinic you went to. Many of us could use that as well.